Blackstone closes private equity fund and first India deal

Blackstone closes world's largest private equity fund and announces Indian pharmaceutical investment.
The Blackstone Group announced earlier this week it had closed its latest global private equity fund, Blackstone Capital Partners V (BCP V) with total commitments of $15.6 billion creating, what it says, is the worldÆs largest private equity fund. The fund will also house BlackstoneÆs first India investment, one amongst several committed investments reported. (BCP IV which closed in 2002 with total commitments totalling $6.45 billion is fully invested.)

Blackstone has a presence across alternative asset investment businesses. In addition to the $15.6 billion in private equity the firm has raised a $7.2 billion real estate fund, a $2.7 billion corporate debt fund, a $620 million hedge fund and a $4 billion fund of hedge funds. Since it started private equity investing in 1987 it has raised a total of $63 billion for alternative asset investing. Currently, Blackstone has private equity investments in 45 portfolio companies.

Stephen Schwarzman, Chairman & CEO of the Blackstone Group says: ôThis extraordinary vote of confidence from our investors is extremely gratifying. The record-breaking amount of capital now at our disposal will allow us to undertake transactions of a size and complexity that was inconceivable just a few years ago, and at a level where there is far less competition for high quality assets.ö

SchwarzmanÆs point about competition is an interesting one û certainly the private equity market is very crowded but it remains to be seen whether the higher end, in terms of deal value, will yield more opportunities.

Blackstone also announced this week that it had closed its first transaction in India since it set up a base there almost a year ago. Blackstone will invest $450 million in Emcure, a vertically integrated pharmaceutical company engaged in research and development and manufacturing of active pharmaceutical ingredients, branded formulations and biotech products. It also markets these products in India and international markets. The Emcure facility has accreditation from the US FDA, UK MHRA, WHO Geneva and MCC South Africa. The transaction is expected to close by August 2006.

Akhil Gupta, Chairman and Managing Director of Blackstone Advisors India says: ôBlackstoneÆs investment in Emcure reflects our strong interest in the Indian pharmaceutical industry which we believe is well positioned to show robust domestic growth as well as benefit from increased amount of outsourcing to India.ö
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